Insight: Danish industry seeks a bigger role in defence

The new defence industrial strategy from DI Defence & Security signals a potentially significant shift in Danish defence thinking.

Rather than treating industry primarily as a supplier of equipment, the document argues that industrial capacity should be regarded as an integral component of Denmark's defence capability.

One of the strategy's most significant proposals is the identification of national defence-industrial "strength positions". These include maritime capabilities, cyber technologies, autonomous systems, ammunition, missile technologies, space-based capabilities and advanced manufacturing.

The document also proposes increasing Danish industrial content in defence procurement by 50 percent by 2030. 

Such an approach would mark a departure from Denmark's traditional reliance on offset agreements linked to individual procurement programmes. Instead, the strategy advocates a more systematic effort to direct defence spending towards building long-term domestic industrial capacity.

The objective is clear: to ensure that the unprecedented sums now being invested in defence generate technological expertise, production capacity and economic value in Denmark rather than flowing primarily to foreign suppliers.

However, the strategy extends well beyond traditional industrial policy.

Several proposals point towards a model in which industry becomes part of the national defence structure itself.

These include strategic partnerships with key companies, contingency contracts for wartime production and plans to integrate industry into military exercises and preparedness activities. In effect, the document argues for a closer integration of defence planning and industrial planning, drawing heavily on lessons from Ukraine.

Perhaps the most eye-catching proposal is the ambition to free up 5,000 military positions by transferring selected support and sustainment functions to industry. The argument is that military personnel should focus on operational tasks while civilian companies assume a greater role in maintenance, logistics and other support functions.

Innovation is another central theme. The strategy recommends allocating 2 percent of the defence budget to research and development, while ensuring that 10 percent of defence procurement is directed towards new technologies.

The aim is to create a more agile ecosystem in which government, industry, academia and the armed forces work together to accelerate the development and adoption of emerging capabilities. 

In addition, DI aims to increase Danish arms export with 30 percent by 2030.

The document also contains a strong critique of existing regulatory frameworks. Lengthy approval processes for security clearances and export licences are identified as obstacles to growth, prompting calls for fast-track procedures and broader administrative reforms designed to accelerate production and exports.

Taken together, the strategy is less an industrial policy document than an attempt to redefine the relationship between government, industry and the armed forces. 

Its central argument is that future military capability will not be generated solely through larger defence budgets or additional equipment purchases, but through a closely integrated ecosystem in which industrial capacity, technological innovation, research and military requirements are developed in parallel.